Caterham’s aims for Abu Dhabi comeback
October 24, 2014 by Joe Saward
The Administrators from Smith & Williamson are planning to take over ownership of 1MRT in addition to acting as administrator for Caterham Sports Limited. This offers the potential for the team – or what is left of it – to race again this season. The news has been reported as Bernie Ecclestone allowing the team to miss to races, but the truth is that under the terms of the contracts between the teams and the Formula One group, all the teams are allowed to miss a maximum of three races and can still retain the franchise, as long as the company that signed the agreement remains solvent. The plan appears to be to miss Austin and Brazil and for the team to retun in Abu Dhabi. This presumably means that the Administrator will make an entry for 2015, which needs to be done by November 1, and will pay the entry fees necessary.

Finbarr O’Connell and Henry Shinners of Smith & Williamson say that the accountancy and investment management group, have agreed terms to acquire the share capital of 1MRT, the Malaysian company which holds the licence to participate in the Formula 1 World Championship. With the debts likely to be wiped out by the Administration, the agreement to acquire the parent company gives the administrators something to sell.

“This includes the Formula 1 licence, the racing cars, the designs and intellectual property for current and future seasons, plus the workforce and all of the technical support provided to the racing team by CSL from the Leafield Technical Centre,” explained Shinners. “Purchasing the assets would give the buyer ready access to F1 racing.”

The problem is that with 11 teams, the teams have very little value because they have to compete for prize money, which only 10 teams get. The 11th team will have to fight for a token payment of $10 million, as happened this year with Marussia. The prize fund is not about to change in the short term. The administrators say that they have already been contacted by a number of interested parties expressing a wish to buy the team, but it is doubtful that the offers will be very large. If Caterham finishes 11th this year, it will be 2017 before it will be able to get back into the top 10 prize money because the pecking order is established by results from two of the last three seasons. Caterham finished 11th in 2013 and will probably do do again in 2014, so it will not be possible to claim big money until the team has finished 10th or above in 2015 and 2016.

The upside of the downside
October 24, 2014 by Joe Saward
The two parties in the Caterham debacle have now descended to throwing accusations at one another, while the Administrator has impounded the cars and locked out the staff. By blocking the team from using the cars the Administrator is basically destroying what little value is left in the business. The staff is not going to hang around hoping that the team will be revived and everyone will be out looking for work with immediate effect. The good people will be snapped up. The good news is that the franchise is not owned by the insolvent company and as long as the holding company 1MRT remains solvent, the franchise will survive until March, when the first race of 2015 begins. However, that will only happen if someone lodges an entry with the FIA before November 1. And that will cost a considerable sum of money. The owner of the 1MRT franchise will need to do that, which appears to mean that Tony Fernandes and his partners (who wanted to get out of F1 at all costs in June) will have to invest more to keep the franchise alive. Given that they do not want to run a team and that they would, in any case, have to buy their assets back from the Administrator (once it is worked out who owns what), it is unlikely that they will do this.

If the Administrator will not allow the team to go to Austin, then he is hardly going to invest in an 2015 entry. However, the way things are going everything looks likely be locked up in a legal dispute for years to come, which will only serve to waste money and damage reputations. In consequence, unless something that moves the story forward emerges, I see no point in further comment on the matter.

End of the F1 road for Caterham and Marussia?
The struggling Caterham and Marussia Formula 1 teams will both miss next week’s United States Grand Prix in Austin, Texas, the sport’s commercial supremo Bernie Ecclestone told Reuters on Saturday.

“Neither of those two teams are going to go to America,” said the 83-year-old.

Their absence will increase concern in the sport, whose smaller outfits have been saying for some time that they risk going out of business unless costs are slashed, even though Ecclestone has said he would be happy with 10 teams.

Caterham went into administration on Friday while Russian-registered Marussia are also struggling financially and are still reeling from French driver Jules Bianchi’s serious accident in Japan three weeks ago.

The air transport for all the teams’ cars and freight is organised by Ecclestone’s Formula One Management and they were due to be flown out on Saturday.

Representatives of Marussia, who are currently ninth in the championship thanks to Bianchi’s ninth place in Monaco in May, were not immediately contactable.

However Caterham’s administrator Finbarr O’Connell told Sky Sports television that the cars remained in the factory at Leafield.

“The racing kit was heading towards Austin but it’s still in the UK. It will stay in the UK and hopefully if Caterham races in one of the last races we will ship the racing kit from here,” he said.

O’Connell added that there had been “10 to 15 serious interested parties on the phone today and we are speaking to all those and getting information together for them to examine.”

By missing the race in Austin, the two teams will also be absent from Brazil since the races are back to back with the cars going direct from the United States to Brazil before returning to Europe.

The 19th and final race of the season is in Abu Dhabi on Nov. 23, when double points are to be awarded for the first time. Ecclestone said on Friday that Caterham had been given a dispensation to miss the next two races while they sought a buyer.

Marussia’s absence, apart from giving 10th placed Sauber more of chance to overtake them in the championship, will leave the grid in Austin with only nine teams and none of the three entirely new entrants that made debuts in 2010. Of that trio, HRT folded at the end of 2012.

The 18-car grid will be the smallest since Monaco in 2005, when the BAR team were banned for two races for a breach of the technical regulations.

The absence of Marussia also wrecks the hopes of American Alexander Rossi, the reserve driver, making a home appearance at Austin although the team had yet to make any announcement about their line-up.

Rossi almost stepped in at the Belgian Grand Prix for Britain’s Max Chilton when contractual problems emerged.

At the time, Chilton’s management suggested he had voluntarily stepped aside “to allow the team to attract much-needed funds by selling his seat” and Marussia were in talks with new investors.

Reports in the European media have indicated that Russian majority owner Andrei Cheglakov has been looking to sell for some time.

Ferrari-powered Marussia ran only one car in Sochi, Russia, two weeks ago, as a mark of respect for Bianchi who remains in critical condition in hospital in Japan after his horrific crash at Suzuka. There has been no medical update on Bianchi’s condition since Sochi.

After watching both practices on Saturday it was odd seeing the empty pits and Pirelli was using the empty spaces for work and having mounting/balancing equipment closer to the teams because it was right on the pit lane.

It is sad to see the lower tier teams struggling to stay relevant. F1 isn't one of those sports that suffers poorly funded participants too well. Cinderella scenarios where a team with the lowest payroll wins the championship don't happen any more. Its too bad because these teams are filled with competent people and would probably be formidable competitors in any other form of racing.

That is a sad sight when Marussia's points are potentially worth more than 10 million.
With Caterham not far behind, and Lotus, Sauber, and Force India all having financial problems, Formula 1 as we know it is on life support.
Teams having to spend $100 - $200 mio per year in the hope to just break even is not a sustainable business model.
As a 5% rights owner, the FIA's Jean Todt has to develop enough testicular fortitude to put his foot down.
Imo, the situation wouldn't have become this critical with Max Mosley still being in charge of the FIA.
The man is entitled to a hobby and his own way of relaxation. Never mind a little S & M spanking scandal.

When good drivers cannot find a seat because they don't bring enough sponsorship money,
I feel massive disenchantment after more than 40 years as Formula 1 fan .

That is a sad sight when Marussia's points are potentially worth more than 10 million.
With Caterham not far behind, and Lotus, Sauber, and Force India all having financial problems, Formula 1 as we know it is on life support.
Teams having to spend $100 - $200 mio per year in the hope to just break even is not a sustainable business model.
As a 5% rights owner, the FIA's Jean Todt has to develop enough testicular fortitude to put his foot down.
Imo, the situation wouldn't have become this critical had Max Mosley still be in charge of the FIA.
The man is entitled to a hobby and his own way of relaxation. Never mind a little S & M spanking scandal.

When good drivers cannot find a seat because they don't bring enough sponsorship money,
I feel massive disenchantment after more than 40 years as Formula 1 fan .

F1 will survive. Arrows, Brabham, Jordan, Honda, BMW, and on and on all came and went. That's not to say they aren't missed, but there is always a "good handful" of people around who want to field an F1 team and who can organize the funding. When I watch all other forms of racing I am quickly reminded how distinctly different (and better) Formula One is from any other motorsport. The sport has a few things to fix but I am confident they will get fixed.